2007 (7) TMI 130 - AT - Central Excise

Primarily the word consumption is understood as using the article in such a manner as to destroy its identity. It has a wider meaning which does not involve the complete using up on the commodity

Summary

Issues:
Challenge to duty demand, Education Cess, penalty, and interest under Central Excise Act, 1944 for captively consumed containers for duty exempted goods.

Analysis:
The Appellant contested duty demand, Education Cess, penalty, and interest under the Central Excise Act, 1944 for using containers captively to pack duty exempted goods. The dispute centered on whether Central Excise duty applied to containers consumed for packing duty exempted goods. The Department alleged that the Appellant consumed HDPE jars/metal containers without paying duty, while the Appellant argued for exemption under Notification No. 67/95 dated 16-3-1995 and Notification No. 10/96 dated 23-7-1996.

The Appellant's counsel argued that the exemption notifications did not bring the Appellant under the law based on a Supreme Court decision. They emphasized that "consumption" did not require the containers to merge with the final product or lose their identity. The counsel cited the Supreme Court's interpretation in Union of India v. V.M. Salgaoncar & Bros. (P) Ltd., stating that containers used for packing could be considered captively consumed to align with legislative intent and the spirit of the notification.

The Judicial Member and the Departmental Representative presented opposing views on the Appellant's entitlement to the notification benefit due to the final product's exemption. After hearing both sides and considering the Supreme Court's interpretation of "consumption," the Tribunal decided to waive pre-deposit and adjudicate the appeal on its merits.

The Tribunal referred to the Supreme Court's interpretation of "consumption" in various cases, emphasizing that consumption did not require the complete use or destruction of the commodity. Relying on precedent, the Tribunal concluded that the Adjudicating Authority should not deviate from the interpretation of "consumption" without a statutory definition. Therefore, the Tribunal allowed the appeal, following the Supreme Court's judgment, and set aside the assessment order.

In conclusion, the Department's appeal in Appeal case No. 262/2007 was dismissed based on the Tribunal's observations and findings aligned with the Supreme Court's interpretation of "consumption" in fiscal law.